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B2B Exchange for 401(k) Plans Receives Addtional $3.0 Million!
Issued by: 401kExchange.com
Date: Oct. 17, 2000
|West Palm Beach, FL, October 4, 2000 –401kExchange.com, the only online "Exchange" in the 401(k) industry, today announced it closed on an additional $3 million financing to extend its leadership position in e-engineering 401(k) plan sales, marketing, & distribution processes. Existing investors and Newlight Associates anchored this new round of funding.
401kExchange.com is the only objective Web-based B2B Exchange that provides objective Service Provider ratings, research information, proposal and analytical services for the 401(k) industry aligning Financial Advisors, Broker Dealers and Employer-Plan Sponsors shopping for 401(k) plans with plan Service Providers who offer 401(k) plans.
"The proceeds from the recent offering will be used to expand product development, marketing and for recruiting the most qualified people available to support our remarkable growth," said Fred Barstein, the company's Founder and CEO.
According to Barstein, year to date, 401kExchange.com processed 528 proposal requests from Financial Advisors, Broker Dealers and Employers with assets totaling over $2 Billion dollars, representing an average of over $3.8 million dollars in plan assets per company.
One new venture firm, NewLight Associates, and the company’s existing investors anchored this round of funding.
“NewLight Associates is very pleased to support the remarkable growth of 401kExchange.com. We are extremely impressed by the management team, existing market acceptance and opportunity for explosive growth,” said Bob Brill, General Partner of NewLight Associates.
401kExchange.com has commercial relationships with 4,000 Retirement Advisors, leading Broker-Dealers, over
100 major 401(k) Service Providers and maintains a research call center operation that contacts more than 200,000 Plan Sponsor each year.
“Securing additional funding amidst an extremely tight private equity market is a validation of 401kExchange.com’s ability to establish a broad acceptance of its open Exchange platform within the 401(k) qualified plan industry, its ability to aggregate meaningful plan traffic, and its relentless dedication and responsiveness to its industry clients and their business needs in the new economy,” according to Chris Lynch, company President.
Historically, Broker Dealers and Advisors have requested 401(k) plan quotes individually from the hundreds of Service Providers without an easy efficient means to analyze the various costs, features, benefits or even the quality of service from multiple Service Providers.
401kExchange.com solves this problem as the only company to function as a clearinghouse for Requests for Proposal (RFP’s) through its “open-ended” retail Exchange site and by offering a unique private label “closed-end” Exchange solution to Broker Dealers through its 401kX Portal Services umbrella. Now Financial Advisors, Broker Dealers and Employers can find detailed 401(k) plan information, objective Service Provider ratings, customized plan/service quotes, in-depth plan analysis plus expert technical support from Online Retirement Consultants in user friendly service modules.
Barstein added, “Our mission will be to continue to drill deeper into 401(k) distribution, sales, and marketing processes to
e-engineer online tools that add value to all constituencies of the market. Through our Exchange framework, we have a sound foundation to deliver solutions to the vast cost, administrative inefficiencies and fragmentation of the market using the Internet platform”.
“By way of example, we are immediately expanding the Exchange’s ability to accommodate the processing of un-bundled 401(k) products and offer a dynamic way for Third Party Administrators to participate in the Exchange”, said Barstein.
The 401(k) online Proposal Service is free to all shoppers. Service Providers pay for the opportunity to respond to a qualified buyer's pricing inquiry on a pay-per transaction basis or a “winner pays” fee schedule (one time fee or amortized over the life of a plan).
The 401(k) market represents approximately 500,000 401(k) company plans with more than $2 trillion in assets both expected to double within the next three to five years. The fastest-growing segment of the industry is companies with fewer than 500 employees and less than $10 million in assets.
Lynch observed, “We offer an extraordinary value proposition to each segment of this large fast growing market. Specifically, to Retirement Advisors we offer powerful, time saving tools that add value to Advisor client relationships in a way that strengthens and re-intermediates their role in the sales, consulting and distribution process.
“Moreover, for the Service Provider community, we offer an efficient means of new client acquisition by pre-qualifying and educating the buyers plus providing significant distribution costs savings opportunities. For Employer-Plan Sponsors, we provide an objective, vendor-neutral platform to inform and educate Plan Sponsors about the 401(k) market, match Employer-Plan Sponsors with qualified credentialed Advisors specializing in 401(k), and provide an unbiased information resource to perform independent due diligence in support of the important decision of choosing a 401(k) plan and Service Provider.”
Steve Getsy, founder of On-Line Ventures and early investor in 401kExchange.com, commented, "On-Line Ventures is very pleased to participate in financing the continued expansion of 401kExchange.com. The company is uniquely positioned in both the retirement industry and B2B space to deliver remarkable, value added, efficiencies to buyers, sellers, and intermediaries in the market using the Internet."
On-Line Ventures is a private investment management firm focused exclusively on emerging growth companies including NETCOM, Exodus Communication Services, Inc., Daleen Technologies, Inc. and FreeMarkets, Inc., all publicly traded companies.
Key financial experts, industry trade publications and the general media agree that 401kExchange.com has delivered the only independent objective source of 401k plan Service Provider ratings, in-depth plan due diligence and analysis resources on the Internet while revolutionizing the 401(k) search and selection process as demand for Internet based resources continues to grow.
401kExchange.com is headquartered in West Palm Beach, FL. For more information, visit the Web site at www.401kexchange.com, e-mail Dlanman@401kExchange.com or phone 561-434-7735 x 226.
For more information: http://www.401kExchange.com
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